Corporate Welfare

I wish I could feel as good about City Hall – more specifically, the elected and appointed officials who set policy and directly impact the lives of Buffalo’ residents – as I do about the image of that grand structure from a distance.

Here are some recent photos I’ve taken while strolling the Erie Basin Marina. Hope you enjoy them.

As you stroll down Chapin Parkway with your Akita Inu or Norfolk Terrier, or while enjoying a cocktail in the Canterbury Woods penthouse lounge, have you ever fantasized about owning Gates Circle? Have the historic fountains, stairways and greenery captured your imagination? If so, you no longer have to be content with viewing this E.B. Green-designed masterpiece from a nearby triangular island or a stylish lofty perch. Thanks to the ingenuity of Mayor Byron Brown’s staff and City Hall sycophants, YOUR DREAM CAN NOW COME TRUE!

On April 16, 2019, Buffalo’s Common Council voted unanimously to create the “Linwood Lafayette Urban Development Action Area” [UDAA] So it would look as if they were complying with a state-mandated requirement that at least 60% of the real property within the UDAA be city-owned, the clever bureaucrats on City Hall’s ninth floor drew the UDAA’s boundary lines to include the public right-of-way on Delaware, Linwood, and Lafayette avenues, and, most importantly, all of Gates Circle!

By including Gates Circle as part of the newly formed Linwood Lafayette Urban Development Action Area, the Common Council has designated this historic public space and all the other land in the UDAA “as appropriate for urban development.”

TM Montante Development may have been shameless enough to request creation of the UDAA. But, the state law authorizing the City of Buffalo to form the UDAA does not limit who can propose a project for all or a portion of the designated area, and empowers the city to sell or lease the land “to any person, firm or corporation.” So your dream can come true!

Christian Campos, TM Montante Development President, awaits 04/16/2019 Common Council vote on UDAA.

Here’s the best part: Not only might you be chosen to own (or, if you prefer, lease for up to 99 years) Gates Circle, by creating the UDAA, the Common Council now has the power to give you incentives to encourage your participation in this program (as if you need an incentive!), including generous 20-year tax exemptions and remarkably favorable loans.

FULL DISCLOSURE: Some cranky old Buffalonians (who believe that our government officials should strive to follow the letter and spirit of the law) have insisted that the Common Council misused the state law that allows a city to designate a UDAA – General Municipal Law, Article 16. They claim that Article 16 and the creation of a UDAA was never intended as a mechanism for bailing out an under-financed developer whose plans for an ambitious private project have encountered unanticipated complications. From their perspective, Article 16’s generous incentives were designed to encourage hesitant private enterprises to partner with a municipality to correct blight and substandard conditions at city-owned properties that had been acquired through urban renewal or condemnation powers. So, if the designation of the Linwood Lafayette Urban Development Action Area is challenged in court, you may have to give Gates Circle back to the residents of the City of Buffalo. [Check out this for background information.]

COMMISSIONS: Buffalo officials aren’t likely to ask for a commission for arranging the sale of Gates Circle to you. [However, if past history is a guide, it probably wouldn’t hurt to donate generously to the campaign chests of the mayor and the various councilmembers.]

PREFACE: I really would like to engage the City of Buffalo’s Common Council in an honest, objective conversation regarding a proposal to create the “Linwood Lafayette Urban Development Assistance Area” at the site of the former Millard Fillmore Gates Circle Hospital. So far I’ve had no takers. An April 2, 2019 post here expressed my primary concerns, and was sent to the nine members of the Common Council within a day or so of its posting. None of our city legislators replied (although Councilmember David Franczyk, while serving as chair of the legislative committee’s April 9th meeting, showed awareness of the issues I had posed, and kindly allowed me an opportunity to provide a “reader’s digest” version of my comments during the public meeting). I followed up with an April 11th email message to each of the Common Councilmembers – which is set forth in full below – inviting the elected officials to contact me with any questions raised by the email or the issues I had presented orally on April 9. Perhaps my letter-to-the-editor, printed in the April 15, 2019 Buffalo News – under the headline, “Pridgen wants to offer gift that may not be deserved,” will be more effective in generating a response. I’ll update this post if and when I hear from a Councilmember.

Meanwhile, here’s what I emailed to Buffalo’s governing body on April 11, 2019:

Common Council needs objective legal advice on BURA/TM Montante’s proposed UDAA, not a “fig leaf”

Dear Council President and Councilmembers,

I am writing to you as a City of Buffalo resident who strongly believes that government officials and agencies must consistently strive to make decisions that are consistent with the letter and spirit of the law. A lesser approach to governing weakens the public’s confidence in the fairness and integrity of both the decision-makers and the decision-making process.

As a lawyer who has spent more than four decades interpreting and studying state and local laws, I am convinced that the request by BURA and TM Montante Development to designate the Linwood Lafayette Urban Development Assistance Area (UDAA) contradicts the purpose of Article 16 of New York’s General Municipal Law (GML). [Please note, I am not opposed to TM Montante Development’s redevelopment plans at the site, only to the designation of the proposed UDAA as a mechanism for restarting the stalled project.]

In my professional opinion, an objective reading of GML Section 691 (Article 16’s “policy and purposes” provision) establishes that the creation of a UDAA was never intended as a mechanism for bailing out an under-financed developer whose plans for an ambitious private project have encountered unanticipated complications. To the contrary, Article 16’s generous incentives were designed to encourage hesitant private enterprises to partner with a municipality to correct blight and substandard conditions at city-owned properties that had been acquired through urban renewal or condemnation powers.

The authority to designate UDAA districts was intended to apply to narrow and specific circumstances which are not present at the Delaware-Linwood-Lafayette site. The limited applicability of Article 16 almost certainly explains why this body has not seen a similar request for many years.

As Buffalo’s governing body, you are collectively faced with a significant issue of legislative intent that will set an important precedent throughout the city, not merely in the Ellicott District. For that reason, I ask each of you to proceed cautiously and to give careful consideration to this matter before casting a vote to approve or disapprove the request.

While I appreciate the request made by Council President Pridgen at the April 9th legislation committee meeting for a written opinion on a number of legal issues raised during that proceeding, it is imperative that this body receive objective legal advice which will provide you with a meaningful basis for rendering your determination. With all due respect to Scott Billman, Esq., it is difficult to see how BURA’s general counsel – the person who prepared the “permission request” submitted to the Common Council and City Planning Board – is in a position to provide an unbiased and neutral assessment of the legality of the proposed designation. [You may also wish to question whether the city’s law department is able to provide objective legal advice on this issue given the Corporation Counsel’s position as a member of BURA’s board of directors.]

Some might call the proposed formation of the Linwood Lafayette Urban Development Action Area (UDAA) – at the former Millard Fillmore Gates Hospital campus – a creative use of an urban renewal agency’s powers. I see it as a shameless distortion of a tool intended to correct conditions in municipally-owned slums and blighted areas.

Article 16 of the State’s General Municipal Law (GML) is entitled “Urban Development Action Area Act.” Its “policy and purposes” section recognizes the existence of “municipally-owned areas” – which were acquired through the urban renewal process, through condemnation procedures, or tax foreclosures – and which are slum or blighted, or are becoming slum or blighted areas. In order to ameliorate the blighted conditions in these municipally-owned areas, Article 16 gives cities such as Buffalo broader rights and powers to offer enhanced tax incentives and financial aid to encourage business enterprises to undertake corrective projects.

Buffalo’s Common Council has designated the Buffalo Urban Renewal Agency (BURA) as the agency authorized to carry out the purposes and provisions of GML Article 16. According to its mission statement, BURA strives to “create quality and vibrant living in Buffalo New York through neighborhood driven development projects.” Its website expressly encourages Buffalo residents “to be involvedwith BURA,” and states that its “goal is quite simple: to become a resource and partner to City residents, community development agencies, and staff in seeking results to the most pressing issues facing the Buffalo area.”

Under its current leadership, however, BURA is pursuing a different goal: to provide corporate welfare to financially-troubled private developers, in this instance, TM Montante Development and the Montante Group Companies.

BURA is controlled by Mayor Byron W. Brown. As Mayor, Brown sits as chair of BURA’s nine-member board of directors. Three of the board’s members hold high-level positions in the Brown Administration (and, therefore, serve at the pleasure of the Mayor): the Executive Director of the City’s Office of Strategic Planning (Brendan R. Mehaffy), who also functions as BURA’s Vice-Chairman; the City’s Corporation Counsel (Timothy A. Ball, Esq.); and, the City’s Commissioner of Administration and Finance (currently, Donna Estrich). The Mayor also hand-picks two citizen board members, ensuring his command over a majority of the 9-person board.

Neither the process used to prepare the proposed Linwood Lafayette UDAA, nor the substance of the proposal presented to the City of Buffalo’s Planning Board and Common Council, complies with the requirements, purposes, or intent of either the Urban Development Action Area Act, or BURA’s own mission statement:

Deficiency No. 1. The official request to create the Linwood Lafayette UDAA, submitted to the City’s Common Council and Planning Board in February 2019, states that it is BURA that “respectfully requests” the designation. However, a review of the agendas and minutes of the BURA Board of Directors – from March 2019 back to June 2018 – discloses that the BURA’s governing body never considered, much less approved, the request to proceed with the Linwood Lafayette UDAA designation. [So much for transparency and neighborhood-driven development projects.] Had the topic been placed on the board of directors’ agenda, its members (including three Common Council members), the media, and, most importantly, the public, would have known in advance of this “creative” use of GML Article 16’s incentives and financial aid.

[Note: It appears that the “permission request” filed with the Common Council was prepared by Scott Billman, BURA’s Counsel. Frankly, I would not be surprised if Mr. Billman was merely following instructions from the head of the Mayor’s Office of Strategic Planning (and, BURA Vice-Chair), Brendan Mehaffy.]

Deficiency No. 2. No objective, rational observer would describe the community within which BURA proposes to create the Linwood Lafayette UDAA as a slum or blighted area. Even the intended beneficiary of the proposed UDAA – TM Montante Development – proclaims that its proposed “Lancaster Square” project is “located in a premier urban, mixed-use neighborhood that the American Planning Association has selected as one of the 10 best neighborhoods in America.”

Deficiency No. 3. The “policy and purposes” of Article 16 is to provide incentives to eliminate slum or blight, or prevent slum or blight, in “municipally-owned areas” which were acquired pursuant to urban renewal powers, condemnation powers, or tax foreclosures. [See GML Section 691.] Article 16’s focus is not privately-owned real property. Despite this fact, BURA’s request for UDAA designation is premised on “the present condition of the privately owned real property in the area [that purportedly] impairs the growth and development of the City of Buffalo municipality because the area is at significant risk of further deterioration and blight …”

[Note: To the extent that the existing “blight” is created by demolition debris not promptly removed by TM Montante, Common Council President and Ellicott District Member Darius Pridgen and other elected and appointed officials must be asked: Why haven’t you insisted that the City’s inspection office compel the property owner to comply with Section 103-38(E) of the City of Buffalo Code? That provision requires removal of “material and debris resulting from demolition” within 5, 10, or 45 days, depending on the height of the demolished structure.]

Deficiency No. 4. Consistent with Article 16’s policy and purposes, an area designated as an “urban development action area” must be “appropriate for urban development,” and at least 60% of the UDAA must consist of city-owned real property. In a tortured effort to meet the 60% city-owned-real-property requirement of Article 16, the “creative” authors of the permission request have drawn the boundary lines of the UDAA to artificially include the entire width of adjacent public roads (that is, Delaware, Lafayette, and Linwood avenues), and historic Gates Circle. These public rights-of-way were undoubtedly not acquired through urban renewal powers, condemnation, or tax foreclosure procedures. And, in this context, they certainly cannot objectively be treated as areas “appropriate for urban development”: TM Montante is not proposing to “develop” these public streets and adjacent traffic circle. Additionally, even the site’s vacant parking garage, while clearly city-owned real estate and (it would appear) deteriorating, was built and operated for decades as a municipal parking ramp, and, presumably, is not the product of a recent condemnation or tax proceeding. [See Buffalo Courier Express article from 1975: BCE19750122 re parking ramp .]

Deficiency No. 5. Article 16 envisions the use of enhanced financial aid and tax relief as incentives to encourage otherwise hesitant business enterprises to participate in programs to correct blighted and deteriorated conditions on city-owned property. The UDAA program is not intended to bail out a private developer who enthusiastically proposes and commences a massive development project, but then, in the words of the Buffalo News, “needs a new partner and financial help to make the project work.” The Mayor-controlled BURA and Office of Strategic Planning have improperly and unwisely chosen to use BURA’s powers and resources, not to stimulate neighborhood-driven development, but to bail out a well-heeled, politically-connected developer.

[Note: Although Darius Pridgen has only received a pedestrian $200 political contribution from TM Montante Development, in the past five years TM Montante and the Montante Group (which includes TM Montante and Montante Construction) have made generous contributions to: Mayor Byron Brown ($1,000), Councilmember Joel Feroleto ($1,000), State Assemblyman Sean Ryan ($1,000), State Senator Tim Kennedy ($1,850), and State Assemblywoman Crystal Peoples ($3,500).]

Buffalo residents deserve an agency that truly focuses on “neighborhood driven” projects – rather than developer-driven handouts – and that works to benefit the public, rather than politically-astute development companies.

So, Buffalonians, get involved, and demand that your elected Common Council members deny BURA’s requested to designate the proposed Linwood Lafayette UDAA.

P.P.S. Likewise, the Linwood Lafayette UDAA proposal is not the first time Buffalo’s “leaders” have embraced an unworkable and inappropriate plan for this site. See Kaleida Health’s 7-12-2013 press release announcing Chason Affinity’s failed effort to recruit a veterinary school to the former Millard Fillmore Gates Circle campus: Kaleida press release 07-12-13 re Gates Circle

In headier days (that is, prior to the Buffalo Billion bid-rigging scandal), Mr. Zemsky proudly instructed communities across our state to “learn the lesson of the Buffalo Billion,” and transform their economies to be self-sustaining “through real investments that actually create jobs.”

Ironically, there are important lessons for communities to learn (beyond the convictions of Buffalo’s Louis P. Ciminelli and SUNY Polytechnic Institute’s Alain Kaloyeros) from our governor’s handling of the Buffalo Billion and Amazon HQ2 project:

First, without the benefit of public comment and input from beyond his inner circle, Andrew Cuomo will miss the broader picture. With the Buffalo Billion, his administration poured $750 million into building the Western Hemisphere’s largest solar panel factory and filling it with sophisticated equipment, but failed to make certain that its tenants – initially SolarCity, now Tesla – were financially secure. With Amazon HQ2, Cuomo arrogantly made decisions that would impact an existing community for decades without seeking the perspective of local leaders and residents, choosing instead to secretly negotiate an agreement with Amazon. [See Memorandum of Understanding signed by Mr. Zemsky on behalf of Empire State Development: amazon – new-york-agreement 11-12-18.]

Second, Andrew Cuomo is willing to ignore state laws meant to protect the environment and character of existing communities. Despite an obligation to assess potential environmental impacts prior to approving funding for a project, members of the Public Authorities Control Board – all appointed by the governor – approved the first $118 million for RiverBend two months before the mandatory environmental review. Then, to ensure a “shovel in the ground” prior to the 2014 gubernatorial election, SUNY Poly, under the now-disgraced Kaloyeros, performed a perfunctory environmental assessment for this massive industrial facility without the benefit of an Environmental Impact Statement. [See RiverBend Negative Declaration 05-21-2014.]

To borrow a phrase from our governor, the Cuomo administration’s handling of both the RiverBend and Amazon HQ2 projects constitutes “governmental malpractice.”

** It’s bad enough that we have unaccountable agencies and boards with the power to disburse millions of dollars in corporate welfare. It is even more problematic for our legal and governmental systems when elected officials appoint to these entities political cronies with histories of poor judgment and ethical lapses. **

It came as a bit of a shock to read the front page article in the October 12, 2015 Buffalo News by political reporter Robert J. McCarthy. Beneath the headline, “Maziarz cleared background check amid investigation – Sources say federal prosecutor is backing off former state senator,” McCarthy reports that the state senate confirmed the appointment last January of former state senator George D. Maziarz “to an obscure hydropower panel” – the New York State Economic Development Power Allocation Board (EDPAB). That action was preceded, according to the article, by “the required State Police background check.”

The newsworthy aspect of the October 12, 2015 story escapes me. The Maziarz appointment was announced ten months ago during the agency’s December 15, 2014 board meeting. At best, the Buffalo News article leaves a reader uncertain whether the former senator’s appointment to the state panel has had any impact on an investigation begun last year by U.S. Attorney Preet Bharara into then-senator’s use of campaign funds. At worst, the headline and front-page report seems to imply that the former senator’s “successful background check” has removed him from legal scrutiny.

Regardless of its purpose, the October 12th article motivated me to investigate the current makeup of EDPAB, and led me to the discovery that Sam Hoyt – who serves as President of Empire State Development’s Western Region, and vice-chair of the Peace Bridge Authority – is also chairman of EDPAB. Further digging also led to uncovering the following: In 2012, NY’s legislature created an even more-obscure hydropower panel, the Western New York Power Proceeds Allocation Board.

The announcement last year that George Maziarz would retire as of December 31, 2014 did not sadden me. In fact, I have made it clear ever since I observed his behavior in 2010-2011 – regarding the proposed Verizon Wireless data center in the Niagara County Town of Somerset – that I do not have a very high opinion of the former state senator [and, I’m pretty certain that the feeling is mutual]. For example:

– The former senator’s banal cheerleading and failure to critically assess the telecommunication giant’s project and intentions, as well as his unflinching support for an estimated $626 million package of “financial aid” for Verizon from NYPA and the Niagara County IDA in exchange for – at best – 200 jobs, reflected poor and misguided judgment.

– His refusal to ask whether a better location in more urban portions of Niagara County (such as abandoned brownfield sites), coupled with his receipt of sizeable campaign contributions in 2008–2010 from the owner of the Somerset parcel, and in 2010 from Verizon, raised questions concerning the manner in which his official actions were impacted by political contributions.

– Public vilification by Mr. Maziarz of my client, a 75-year-old widow who owned farmland across the road from the proposed site, for asserting her rights under New York’s zoning and environmental review laws, demonstrated both a mean-spiritedness and a misunderstanding and disdain for the rights of average citizens and property owners. His false and public accusation – archived in a March 21, 2011 video clip for “The New York State Legislative Report” – that I had sought out my client and used her as a “pawn” in furtherance of an unidentified party’s interests, shows a reckless and dangerous disregard of the truth unacceptable in a public servant. [In fact, when my client’s daughter contacted me in a panic two days prior to a public hearing before the Somerset town board, and asked me if I could attend the hearing on her mother’s behalf, I embarrassingly told her that I had no idea where the Town of Somerset was located.]

So the thought of Hoyt and Maziarz comprising two of four members of the EDPAB board is downright disconcerting. In theory, the power allocation board’s primary role is to serve as a “watchdog” on behalf of the public, ensuring that the New York Power Authority (NYPA) uses its financial clout within the requirements and criteria prescribed by law. Sadly, that “dog” has refused to bare its teeth, much less bite.

More specifically, it is my opinion that EDPAB exhibited a willingness in 2010 to disregard both the law and ethics when it rubberstamped a request for $105 million to fund development at Buffalo’s Canalside. What follows is a detailed summary of what occurred in February 2010 – taken from an unanswered email that I sent in September 2010 to then-editor of the Buffalo News, Margaret M. Sullivan:

In need of additional funding for the Canal Side project, the project sponsors, Empire State Development Corporation [ESDC] and its local subsidiary, ECHDC, asked NYPA to provide an “Industrial Incentive Award” [IIA] of $3.7 million per year for 20 years to help finance the project. There were two basic problems with ESDC/ECHDC’s request. Pursuant to NYPA’s annual Economic Development Plan, IIAs were only available to industrial companies in NYS “at identifiable risk of closure or relocation to another state.” The Canal Side project, and its long-pursued “destination retailer,” Bass Pro, obviously did not fit that criteria. Additionally, NYPA’s annual Economic Development Plans had never included a 20-year funding proposal. Despite these defects, NYPA asked its oversight agency, EDPAB, to approve the proposed funding package for the Canal Side project.

On February 2, 2010, EDPAB held a special meeting, by video conference, for the sole purpose of considering NYPA’s funding proposal for the Canal Side project. The EDPAB Chairman, Kenneth Schoetz, participated in the video conference from the 95 Perry Street office suite of ECHDC and his employer, ESDC, the agency that had requested the Industrial Incentive Award for the waterfront project. Mr. Schoetz, who had previously served as ESDC’s Acting Upstate Chairman, held the position of ESDC’s “Senior Vice President of Regional Offices” on February 2, 2010. Despite the fact that the proposal under consideration represented a radical departure from prior EDPAB policies, requiring EDPAB to revise the then-current Economic Development Plan to extend it from 2016 to 2029, and to add a new “permissible use” to the list of uses of Industrial Incentive Awards, Chairman Schoetz chose not to recuse himself from participating in the discussion and voting on the proposal. In fact, he provided the third and decisive vote required by statute to approve the resolution.

Plaintiffs in Goldman, et al. v. Bass Pro Outdoor World, L.L.C., et al. (NYS Supreme Court, Erie Co., Index No. 7723/2010), contend that Mr. Schoetz’s dual role, as EDPAB Chairman and ESDC’s Senior Vice President, created a disqualifying conflict of interest, or, at a minimum, the appearance of impropriety. Responding to that claim, Mr. Schoetz has provided a sworn affidavit to the Court in which he denies any impropriety and states:

There is no conflict of interest nor even the appearance of impropriety here. It is common for public bodies with similar missions to have cross involvement… The purpose of having an ESD employee serve on EDPAB is to promote cooperation and consistency in economic development decisions. [Emphasis added.]

The so-called “cross involvement” touted by then-Chairman Schoetz, and the “cooperation and consistency” that he says it promotes, help to explain the often narrow, myopic perspective of agencies such as NYPA and Empire State Development (and its subsidiaries, such as Erie Canal Harbor Development Corporation). Such inbreeding also helps to accelerate the public’s loss of confidence in the integrity and wisdom of the economic development process.

Given their past history, Sam Hoyt and George Maziarz are not likely to make decisions in their capacity as EDPAB board members that will help restore the public’s faith in government decision-makers – unless, perhaps, U.S. Attorney Preet Bharara is available to babysit.

** By embracing – rather than eschewing – corporate welfare/crony capitalism, the Pegula and Jacobs families help perpetuate a political system where corporate money speaks much more loudly than the voices of average citizens. **

Terry Pegula, co-owner – with his wife Kim Pegula – of the Buffal Sabres, Buffalo Bills, and HarborCenter, was introduced as a “true Buffalo philanthropist” at the September 21st grand opening of the Marriott hotel, an imposing structure at the edge of Buffalo’s “lighter, quicker, cheaper” Canalside. One week earlier, a Buffalo News editorial touted “the absolute dedication” of Jeremy M. Jacobs Sr. “toward this community” following his family’s $30 million gift to the University at Buffalo medical school. An accompanying article on September 14 referred to the family’s “philanthropy” as transformational, noting that the Jacobs clan had provided the second largest donation in UB history “behind only a $40 million gift made anonymously in 2011 by a late local doctor.”

Undoubtedly, a $30 million donation – regardless of its tax-deductible status, and whether or not it represents less than one percent of Mr. Jacobs’ estimated $4 billion net worth – is staggering. From my perspective, however, a “philanthropist” is a person who does more than make a generous gift – she or he actively promotes human welfare and social reform.

Jeremy Jacobs, with his billions, and Terry Pegula, reported by Forbes as having an estimated $4.6 billion net worth, were recently in a position to demonstrate a true commitment to the future of Western New York. As billionaires, the Jacobs and Pegula families could afford construction of their respective downtown Buffalo projects without the necessity of financial assistance in the form of real property tax abatements, sales tax credits, and other manner of corporate welfare. Proceeding without taxpayer-funded aid would have set a significant example for other well-heeled developers, and would have constituted a highly visible first step in restoring a semblance of integrity to our political system. But, motivated perhaps by a sense of entitlement, Buffalo’s Billionaires chose profit over the promotion of political reform and human welfare.

Despite being owned by one of the Nation’s wealthiest citizens, a Buffalo-bred company won hundreds of thousands of dollars in tax breaks Monday, to ensure it stays in the Queen City for foreseeable future. The Erie County Industrial Development Agency (ECIDA) board of directors voted unanimously to grant Delaware North, owned by billionaire Jeremy Jacobs, $807,000 in sales tax abatements, so that it can move its corporate headquarters from the Key Center, approximately two blocks to a new $80 million building proposed by Uniland Development at the corner of Delaware Avenue at Chippewa.

Notably, the vote approving $800,000 in tax breaks [chump-change for a man worth four billion] was preceded by a less-than-philanthropic warning from the senior Jacobs son, Jerry Jacobs Jr., that Delaware North would find it “hard to turn down” a better offer from another city if it failed to receive the financial assistance it had requested. Equally disconcerting, Gov. Andrew Cuomo directly interceded on behalf of Delaware North and, as reported by the Buffalo News, “placed a call to CEO Jeremy Jacobs Sr. to assure him that his administration will do what it can to keep Delaware North in Buffalo.”

What is most troubling about the Governor’s call to “philanthropist” Jacobs is the fact that the Buffalo billionaire had made a $50,000 donation in June 2010 to Mr. Cuomo’s campaign, and contributed an additional $11,250 to Andrew Cuomo in August 2014 during the Democratic primary skirmish between the incumbent Governor and challenger Zephyr Teachout.

Note: Ms. Teachout, a Fordham University law professor and staunch critic of government corruption, had the following to say in an op-ed piece printed in the Buffalo News just weeks after Mr. Jacobs generously donated to Mr. Cuomo’s campaign:

…

Western New York cannot afford to repeat the mistakes it made generations ago when businesses placed profits over clean air, clean water and the health of residents. The Buffalo Billion must be allocated without favoritism, and the selection process should be transparent. Winners must include local companies and small businesses that truly need the assistance to grow. Certainly the commitment of 20 percent of the Buffalo Billion to one project, RiverBend – a project that has repeatedly changed in size and scope – should be carefully re-evaluated.

It may only be a coincidence, but it is demoralizing for competing companies, taxpayers and residents to learn that two prominent Buffalo developers, LP Ciminelli and Uniland Development, were awarded major developer status for two Buffalo Billion projects following sizable contributions to Andrew Cuomo’s 2014 campaign.

Meanwhile, the Pegulas (frackers who who made their fortune in oil and natural gas) possess the wealth needed to spend a total of $1.6 billion to purchase the Buffalo Sabres and Buffalo Bills and develop HarborCenter. And, as expressed by a longtime confidant of the billionaire couple, they were “not upset at all” that the final price tag for constructing “something very special” alongside Buffalo’s Inner Harbor exceeded initial projections by approximately $40 million.

Perhaps the higher final price for HarborCenter “was not a concern” for these Buffalo newcomers because they are receiving public assistance totaling around $57 million to further their for-profit venture. They applied for, and received at taxpayers’ expense, a thirty-seven-million-dollar corporate welfare package for the HarborCenter project, described in the following manner by the Buffalo News:

… The ECIDA approved a nearly $37 million tax incentive package that includes $28 million in property tax breaks over 10 years, $7.5 million in sales tax savings and $1.2 million in mortgage-recording tax breaks.

Oddly, the media appear eager to downplay the financial aid that the Pegulas have received in furtherance of the HarborCenter development. Chris Caya, the usually reliable WBFO reporter, refers to “a relatively small public subsidy” in his recent report, identifying “$35 million in tax breaks,” but failing to reference the additional $20 million in brownfield tax credits. Similarly, Buffalo News reporter Jonathan D. Epstein, felt the need to favorably contrast HarborCenter and UB’s new medical school, Kaleida’s new women and children’s hospital, and SolarCity at Riverbend, mentioning the $37 million ECIDA hand-out but leaving out a dollar amount when referring to state brownfield credits:

… Only the University at Buffalo’s new Jacobs School of Medicine and Biomedical Sciences ($375 million), the John R. Oishei Children’s Hospital ($270 million) and the factory for SolarCity at Riverbend in South Buffalo ($250 million) are more expensive. And all three of those are public-sector projects, with far more government support than the tax breaks – $37 million from the Erie County Industrial Development Agency plus state brownfields tax credits – that the Pegulas received…

But I do not want to understate the political donations made by the Pegulas. New York State records show that between September 13, 2013 and October 25, 2014 – a mere 13-month period – Kim and Terry Pegula made personal contributions totaling $67,000 to Gov. Andrew Cuomo.

There is no way we can rationally deny the ugly fact – so aptly captured by Buffalo News political cartoonist Adam Zyglis on September 18, 2015 – that Buffalo is indeed a “Tale of Two Cities,” with a spruced up waterfront and a morally-unacceptable poverty rate. Given this reality, we need billionaire philanthropists who will refuse to partake in corporate welfare and, instead, work toward a political system were the voices of Buffalo’s average citizens can be heard over the deafening roar of corporate money. I won’t hold my breath.

With All Due Respect,

Art Giacalone

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